JP Morgan debacle: Regulation of the banks and Dodd-Frank

#1
lawgator1

lawgator1

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#1
I realize that there are a lot of concernsout there about how far this legislation goes and that the rules that will come from it are still being debated.

JP Morgan invest $10 billion in some sort of risky hedge fund bet, and lost $2 billion of it, and apparently way outside their comfort zone both in terms of what they invested in and how it was implemented.

Does this prove the need for further regulation? Does it give support to champions of Dodd-Frank? Or is it just risk that they took and sometimes you win, sometimes you lose?
 
#2
#2
lawgator1 said:
I realize that there are a lot of concernsout there about how far this legislation goes and that the rules that will come from it are still being debated.

JP Morgan invest $10 billion in some sort of risky hedge fund bet, and lost $2 billion of it, and apparently way outside their comfort zone both in terms of what they invested in and how it was implemented.

Does this prove the need for further regulation? Does it give support to champions of Dodd-Frank? Or is it just risk that they took and sometimes you win, sometimes you lose?
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This.
 
#3
#3
Free market economy is free to win and free to lose. Not always win. Gov't oversight itself will increase cost of doing business every year. So, pick your poison depending on whether your are left or right.
 
#4
#4
Reading more about this, it was apparently some single trader in the UK who was responsible. They are calling him the "London Whale."
 
#5
#5
If the loss was far reaching enough they would have got a bailout anyway. Free market, free market, free market...until you lose REALLY big.
 
#6
#6
lawgator1 said:
I realize that there are a lot of concernsout there about how far this legislation goes and that the rules that will come from it are still being debated.

JP Morgan invest $10 billion in some sort of risky hedge fund bet, and lost $2 billion of it, and apparently way outside their comfort zone both in terms of what they invested in and how it was implemented.

Does this prove the need for further regulation? Does it give support to champions of Dodd-Frank? Or is it just risk that they took and sometimes you win, sometimes you lose?
Click to expand...

No. You can't write enough rules to control for all the stupidity and dishonesty that is out there. Rules hamstring responsible and productive individuals, while the stupid and unethical find loopholes. No matter how many rules, there will always be loopholes.
 
#7
#7
lawgator1 said:
Reading more about this, it was apparently some single trader in the UK who was responsible. They are calling him the "London Whale."
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The fact that one guy had this ability is troubling. Wasn't that also the defense of the mortgage backed securities thing? It was only a small group that brought the whole thing down?

Sounds like there are management problems.
 
#11
#11
I heard Dimon was very frank in the teleconference about it and that he's dealing with it. Admitted fault, and said it's being handled. I expect a few people to be losing their jobs. No new regulations are needed.
 
#13
#13
Weezy said:
I heard Dimon was very frank in the teleconference about it and that he's dealing with it. Admitted fault, and said it's being handled. I expect a few people to be losing their jobs. No new regulations are needed.
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Being forced to quit doesn't prevent it from happening in the first place, though.

Was this their own money? Or customers' money? Anyone know?

I'd be far less inclined to regulate in response if it was their own money. If it was customers' money and it was possible for someone to do this basically undetected such that investors weren't aware, I can see how that might justify some sort of requirement of management notification of what's going on -- at least that way you wouldn't have them blaming it on some guy sitting in a cubicle in London.
 
#15
#15
lawgator1 said:
Being forced to quit doesn't prevent it from happening in the first place, though.

Was this their own money? Or customers' money? Anyone know?

I'd be far less inclined to regulate in response if it was their own money. If it was customers' money and it was possible for someone to do this basically undetected such that investors weren't aware, I can see how that might justify some sort of requirement of management notification of what's going on -- at least that way you wouldn't have them blaming it on some guy sitting in a cubicle in London.
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Why does it matter where the money came from? I imagine that this risk was taken by the JP Morgan's Investment Banking arm; what do individuals think they are doing when they hand their money to investment bankers? They are asking them to take risks.
 
#16
#16
therealUT said:
Why does it matter where the money came from? I imagine that this risk was taken by the JP Morgan's Investment Banking arm; what do individuals think they are doing when they hand their money to investment bankers? They are asking them to take risks.
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You don't think the bank should inform the investor of the instrument ? And doesn't the bank have a fiduciary duty to the investors to at least be aware of the risks the bank's employees are taking ?
 
#17
#17
lawgator1 said:
You don't think the bank should inform the investor of the instrument ? And doesn't the bank have a fiduciary duty to the investors to at least be aware of the risks the bank's employees are taking ?
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you really have NO CLUE do you
 
#20
#20
The bank will still make a couple of billion dollar profit this quarter. Not all investments are winners.

But let's have a congressional hearing on it...especially when Washington is losing a Trillion a year. :rolleyes:
 
#22
#22
Wonder if any of you who are so quick to dismiss this have your own money at risk at JPM. I imagine that, if you did, you might have a different view.
 
#23
#23
lawgator1 said:
Wonder if any of you who are so quick to dismiss this have your own money at risk at JPM. I imagine that, if you did, you might have a different view.
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Shall we run the economy according to the principles of empathy? Get out of here with that nonsense!
 
#24
#24
lawgator1 said:
Wonder if any of you who are so quick to dismiss this have your own money at risk at JPM. I imagine that, if you did, you might have a different view.
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unfortunately we are all already invested with the US govt. But what could go wrong with that?
 
#25
#25
lawgator1 said:
Wonder if any of you who are so quick to dismiss this have your own money at risk at JPM. I imagine that, if you did, you might have a different view.
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I actually do and knew exactly what they were doing, as any good investor would. Has NOTHING to do with your line of ignorant bull shat.
More proof that you want a "nanny state" and the government running your life........pathetic

If one can not stand to lose the money, stay the hell out of the game.
 
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